Failure of high-profile messaging apps to find effective ways to monetise will “doom some of the high flying companies today – unless those companies are acquired by larger corporations that use them as brand extensions”, according to Strategy Analytics.
The company said that the success of such apps demonstrates how they can “crater existing business models without replacing revenue”. It said that while messaging apps share many common features, “the most prevalent is a shared lack of monetising messaging”.
It was noted that the ability to easily change messaging apps – with a number of free alternatives available – means that app providers will not be able to charge for their core feature. However, there is no clear business model for how to generate revenue, for example with the methods used by APAC-focused apps (including a virtual goods business focused on personalisation) possibly not fitting with mass market customers or western consumers.
Josh Martin, director of apps research for the analyst firm, said: “The notion that over the top messaging services can be perpetually revenue-free will proliferate until one service fails – making consumers face the stark reality that everything has a price. As over the top messaging services transition to social networks, the need for them to maintain eyeballs could provide an opening for Joyn – an operator-backed OTT messaging initiative.”
“Without the need for advertising revenue, Joyn could extend beyond a messaging app and turn into a platform that attracts third party developers and with them innovation. If operators can build a platform with robust API and developer support they can differentiate from the competition and perhaps open a new revenue stream for themselves,” he concluded.